Phoenix – Ahwatukee-Foothills Real Estate Market Update – January 1, 2020
The Ahwatukee-Foothills average property value rose again in the period from January 1, 2019, to December 31, 2019. The average value increased to $374,840. in 2019 up from the $356,272. in the same period of 2018 for an increase of 5.2% over 2018 values.
The Phoenix market is experiencing one of the lowest active listing inventories in the nation. Only 131 properties closed escrow in December with an average price of $377,351. versus 92 that closed in December 2018 at an average price of $350,329. The average value of an Ahwatukee-Foothills property in 2019 was 7.7% higher than the average value in December, 2018. We averaged 138 closed listings per month in 2019.
Throughout 2019 our active listings inventory has been hovering around 160 to 170 units. As of January 1, 2020, there are only 139 active listings. At the current 138 average number of sales per month, our inventory of 139 active listings would last about one month. The number of homes that came on the market in December rose to 92. December is traditionally a slow listing month due to the holiday season, but the number of listing that came on the market in December increased significantly over recent months. Hopefully, the listing activity will continue at this improved pace in January and beyond to meet buyer demand, as we ramp-up for our active Spring market.
Anything under a six-month inventory is considered to be a strong seller’s market. The Ahwatukee-Foothills inventory is very low but the number of sales remains strong and favors sellers. Nicely updated, well priced and well-maintained properties, that are marketed effectively with video and HDR photos, are going under contract a matter of a few days and often a few hours. If you are planning to sell an Ahwatukee property, the numbers are certainly in your favor and there has never been a better time to sell.
We are frequently asked what is going on in the Ahwatukee-Foothills real estate market. Many homeowners are fearful that a slowdown is imminent. Granted our national economy is cyclical and we are entering into an unprecedented 12th year of expansion. So what is going on? Is slowdown inevitable? If there is a slowdown, what will happen to real estate values?
A report I trust indicated that one-hundred economists and real estate experts across the country were interviewed and without exception, every interviewee indicated that, given the cyclical nature of our economy, an economic slowdown is inevitable. An economic downturn is overdue in the opinion of many of the experts. Some anticipated that it would occur in 2019 or 2020. The current consensus is that 2021 is a more likely timeline. However, and to allay the fears the mention of an economic slowdown brings to those who were impacted and recovering from the real estate implosion of 2007 and 2008, the coming slowdown will be just that, a slowdown. It is not expected to be a major disruption on the scale of the events of 2007 and 2008. It was the opinion of all of the interviewees that the national real estate market would continue to expand and that real estate values would increase by 3% to 4% despite the anticipated economic slowdown. Local markets could see average values above or below the anticipated 3% to 4% national increase in average property values based on local conditions.
It is interesting to note what happened in our market that led up to the implosion of property values in 2007 and 2008. Historically, in the years from 2000 to 2003, the average value of Ahwatukee-Foothills properties increased predictably at a rate of three to six percent per year. In 2003 the average price of an Ahwatukee-Foothills property was $244,291. In 2004, 2005 and 2006 our market overheated. At the top of the market in 2006, the average price of an Ahwatukee property had increased by 49.6 percent to $416,965. As we learned, that market was unsustainable. Funny money loans, an influx of out of state investors and speculation drove prices to unsustainable levels. The market turned in 2007 with a 2.5% drop in the average price of an Ahwatukee-Foothills property. In 2008, 2009, 2010 and 2011 the market went into a free fall with prices tumbling 22% in 2008, 20% in 2009, 9% in 2010 and 5.6% in 2011.
Relief came in 2012 when the average price of an Ahwatukee-Foothills property rebounded and increased by 15.8% to $252,771. The recovery continued and in 2013 the average price of an Ahwatukee-Foothills property increased 16.8% to $295,188. Ahwatukee-Foothills property values increased slowly in 2014, 2015, 2016 and 2017 with 2% to 3% annual increases in the value of an Ahwatukee-Foothills property. The 8.5% jump in the average value of Ahwatukee-Foothills properties in 2018 was a welcome relief. The steady increase has continued in 2019 and the average price of an Ahwatukee-Foothills property increased over 5% to an average value of $374,840.
Homeowners need to be assured that the current Ahwatukee-Foothills real estate market in no way resembles the market that led up to the implosion in property values in 2007 and 2008. Many reforms have taken place in the property lending market, interest rates have held below 5% and lower for months, demand is strong and the Ahwatukee-Foothills active listing inventory is at record lows. Also, the Phoenix population is increasing at record levels and it is anticipated that Phoenix will become the fourth largest city in the country in 2020.
The metro-Phoenix area and Ahwatukee Foothills are well-positioned to thrive in the event of an economic slowdown. Based on the opinion of the experts, we anticipate that an economic slowdown will be mild and Ahwatukee-Foothill’s property values will continue to rise above and beyond the national averages for the immediate future.
So, in summary, the Ahwatukee-Foothills real estate market is healthy and strong. The average value of a property is rising monthly, interest rates are holding under 5% and typically lower. The active listing inventory is at record lows and it is a strong seller’s market. It is an excellent time to list and sell an Ahwatukee-Foothills property. Feel free to contact us with any questions.
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Allen Henderson Henderson Real Estate 480-392-2090 firstname.lastname@example.org
*Ahwatukee Foothills is the official name of an Urban Village in Phoenix. Ahwatukee Foothills lies south of South Mountain Park. “Ahwatukee Foothills” is comprised of zip codes 85044, 85045 and 85048. Some confusion occurs when some folks refer to Old Ahwatukee as “Ahwatukee” and “Ahwatukee Foothills” as a separate entity. So, for clarity, when we use the term “Ahwatukee” we are referring to the entire area designated “Ahwatukee Foothills,” including (85044, 85045, and 85048) unless otherwise noted.